According to initial police findings, a white car struck several people in Berlin's Tiergarten park on Saturday night before crashing into a tree, police spokesman Florian Nath said.
The driver left the vehicle and fled in an unknown direction, police said.
"Seventeen people have been injured, including one deceased person and several with life-threatening injuries," he said on X.
Investigators were examining whether there had been a second phase of the incident after the car struck people, including whether someone had left the vehicle and attacked people with a possible bladed weapon.
"That is what witnesses have told us - that there are reportedly people lying there with stab wounds."
"We currently know nothing about any possible motive or the identity of the perpetrator or anything similar," police said.
"None of that has yet been established."
According to police, there were conflicting accounts over whether one or more perpetrators were involved.
Nath said officers were therefore taking a broad approach to the investigation, but declined to provide further details.
More than 2200 police officers have been deployed in Berlin since Saturday morning, some heavily armed, with undercover officers also involved, he said.
Emergency services remained at the scene, while visitors were asked to leave and avoid the wider area. Berlin Mayor Kai Wegner described the incident as "an attack on our free and open society".
"After a peaceful and colourful CSD, this gathering for a tolerant and peaceful Berlin was attacked in the most brutal way," he said in a statement.
Wegner thanked the emergency services for their swift response and said he was confident police and security authorities would conduct a thorough investigation.
Hundreds of thousands of people had gathered in the German capital on Saturday to celebrate Pride.
Organisers said the march was intended to send a message of democracy, tolerance and diversity.
Berlin's Senator for Urban Development, Christian Gaebler, cautioned against speculation over the cause of the incident, saying it was too early to determine whether there was any political or criminal motive.
He noted that the incident had occurred in the Tiergarten park rather than at the Pride march itself, making the situation more difficult to assess.
The Berlin Pride parade is one of the largest events for the lesbian, gay, bisexual, trans, intersex and wider queer community (LGBT+) in Europe.
The festivities were called off at about 10 pm local time (6am Sunday AEST) following the incident.
with dpa
